The SEC exposes Illinois's misleading reports on pensions while Greece cleans up its financial data to help end the euro crisis. Clean accounting, like light on a dark street, helps eliminate financial deceit.

Streetlamps are an efficient policeman, said famed jurist Louis Brandeis. The same can be said of honest accountants. When they shine a light on shady statistics, it encouages the practice of financial integrity.

Take, for example, news on Monday that Illinois has agreed to a cease-and-desist order imposed by the Securities and Exchange Commission (SEC). The federal agency accused the state of misleading investors from 2005 to 2009 about the risky conditions of its underfunded pensions for state workers. Illinois’s estimated $96.7 billion in pension liabilities is among the largest of any state.

The SEC’s charges found Illinois failed to reveal that it had abandoned a five-year plan to fund its pension systems. In effect, investors paid too much for the state’s bonds.

Illinois will not be punished for fraud, however, as it has already begun to clean up its financial books and accounting methods. “It is critical that we learn from the state’s mistakes and never again play games with our pension systems,” said Illinois State Comptroller Judy Baar Topinka.

Illinois didn’t really have to wait for the SEC crackdown as it saw in 2010 how the agency nailed New Jersey for misrepresenting its financial health. New Jersey was accused of creating the accounting illusion that it had a special reserve for its pensions. And since then it, too, has moved toward honesty in its disclosures.

Such revelations of wrong-doing have been easier to spot since the world financial crisis of 2008-09. A receding tide exposes many shipwrecks. The most notable and perhaps most damaging exposure was that of fraud by the Greek government.

In 2009, honest accountants found Greece had lied about the size of its deficit. Instead of being 6 percent of the economy, it was 15 percent. The news precipitated the euro crisis and sent Greece into a six-year recession.

The exposure shed light on many of Greece’s dishonest practices, such as widespread bribery and tax evasion. The government is working hard to reduce both – under pressure from international creditors. (Argentina is also under pressure from the International Monetary Fund to clean up its low-ball statistics about high inflation.)

Greece’s reforms have a long way to go, but it has at least begun to prosecute high-level officials for corruption, such as a former defense minister and a city mayor. And a survey by Berlin-based Transparency International finds the level of petty corruption in Greece actually fell last year.

More Greeks, for example, refused to pay requested bribes in 2012 than the year before. “Greeks have realized that they can survive even without a ‘fakelaki’ [little envelopes],” says Costas Bakouris, the group’s chief in Greece. “This can be seen as a unique opportunity for total restructuring, since the financial crisis has affected a significant number of institutions.”

Heavily indebted governments like those in Illinois and Greece that have fessed up to financial shenanigans could enjoy a new respect. With more integrity in their finances, they can attract the private investment needed to pay off their debts. Honest accounting can, like a streetlamp at night, help keep away the darkness of corrupt practices.